North Carolina broadband bill would eliminate level playing field

Op-ed: In this guest editorial, Josh Levy of Free Press argues that a bill …

Op-ed: In this guest editorial, Josh Levy of Free Press argues that a bill that would ban the construction of new municipal broadband networks would stifle competition and make it tough for existing municipal networks to survive.

Michelle Kempinksi lives in Cedar Grove, North Carolina, a township of about 2,000 on the fringes of Orange County. The county is home to the University of North Carolina at Chapel Hill, and thousands of plugged-in residents enjoying the benefits of high-speed broadband. In Cedar Grove however, life is a different story.

Kempinski is a landscape architect. Like others in her field, she uses complex AutoCAD (a 3D design program popular with engineers) and GIS (geographic information system) applications to produce and move around big files used to map and build in physical spaces.

She started in her own business in 2004—just as people started using the Internet to e-mail large files to each other, rather than sending each other bulky CDs in the mail. For Kempinski, the transition from CD to e-mail wasn't so easy. "Any time I try to collaborate, there's always large files that need to be transferred between firms," she said. "GIS applications, other CAD documents, governmental forms, everything is online."

Everything being online was a problem, because Kempinski’s corner of Orange County lacks dependable access to high-speed Internet. North Carolina’s two biggest cable providers, Time Warner Cable and CenturyLink, don't provide service to Cedar Grove, so Kempinski and her neighbors must make do with notoriously fickle wireless broadband cards. Until she purchased an additional antenna to improve reception, Kempinski would consistently lose her Internet connection every five minutes. And once the antenna was in place, she still dealt with slow speeds that made it impossible to send the big files that were her business' bread and butter.

"The assumption is that everyone has access, so the files get larger and larger over time," Kempinski says about her field. After a few years, the technology had advanced to the point that she couldn't access online GIS mapping tools at all. It was like a carpenter working without a hammer.

Earlier this year, Kempinski had to make a hard decision. "With the economic crisis and housing bubble bursting, combined with the inability to broaden out to other areas and compete in a larger geographic area, I had to end the business," she says. Without high speed broadband, she couldn't compete.

Kempinski is not alone. Millions of people across the country lack access to broadband Internet because big companies like Time Warner Cable, CenturyLink and AT&T don't find it profitable to reach into their areas. And even those with access to those services often find them unreliable or too expensive. The result of this lack of access to affordable high-speed broadband is more stories like this: businesses that can't compete, students who struggle to get online, and entire communities that are left behind.

In response to this neglect, several North Carolina communities have built their own broadband networks, offering high-speed broadband connections for a better price than their corporate competitors—if they have any. But the state legislature just passed a bill that would outlaw new municipal networks and strangle existing ones.

The legislation is the doublespeak-filled "Level Playing Field/Local Government Competition Bill (H129)," which would in fact create an unequal playing field and eliminate competition by restricting the cable market to existing cable companies, hamstringing some municipal networks so much that they’ll find it tough to stay alive.

Over the last few years, municipal networks like Salisbury's Fibrant have entered markets that have seen no or little competition to date. Suddenly, residents in these communities are being offered real choices based on cost and speed, rather than having to settle with the only cable game in town.

Predictably, the big cable companies view these municipal upstarts as major threats. Companies like Time Warner Cable and CenturyLink may be unwilling to extend their networks to communities like Cedar Grove, but they don't want anyone else doing it either—such an incursion would pose a threat to North Carolina’s de facto cable duopoly. Ironically, the weapon these traditionally regulation-shy companies have turned to in order to fight the municipal broadband effort is regulation.

Phillip Dampier, who runs the broadband news site Stop the Cap!, has argued that the legislation "would micromanage community-owned broadband networks right down to the streets they would be allowed to deliver service. Those terms, perhaps unsurprisingly, would not apply to the state’s largest cable and phone companies." Time Warner Cable has been the foremost proponent of the bill, lobbying for it heavily throughout the state.

If passed, the "Level Playing Field" bill would put an end to efforts to create municipal broadband systems in North Carolina, making it financially impossible for municipalities to start new projects and restricting current networks from growing beyond their present size. Catharine Rice, president of SEATOA, a four-state community broadband and PEG association, who has been leading the charge against this and similar bills that have been brought before the state legislature, argues that limiting growth in this way is "the best way to shut a business down." This appears to be Time Warner Cable’s intention.

The bizarre legislation is heavily weighted to the interests of the incumbent telecoms, and boasts a champion in Rep. Marilyn Avila, who cites the need to protect taxpayers as the main impetus behind the bill. "This particular issue," she told Raleigh's WRAL, "is that municipalities' core services are being damaged by this particular approach in getting into the business world and committing the responsibility for that success or failure to a very finite group of people."

But those who run these municipalities beg to differ. The town of Chapel Hill, which has begun work on its own broadband network, recently passed a resolution “urging members of the General Assembly and Governor Perdue to oppose” the bill. Mayoral-Aide Mark F. McCurry said, “The Town of Chapel Hill is in the process of installing a high speed fiber optic network in town. The Council is very concerned about the restrictions the broadband bill would place on the Town’s investment.”

Even the cities unaffected by the bill are opposing it. Doug Paris, the assistant city manager for the city of Salisbury—one of the five communities in North Carolina with existing municipal networks that, thanks to amendments to the bill, won’t be eradicated by H129—is also critical of the bill.

Anyone who wants to invest in infrastructure should be allowed to do so,” he says. “There are areas in North Carolina where there are some access issues, where you can only get Internet via satellite. The opponents of this bill feel that these people will be left behind. The industry has not served it in the past—that's the track record, and the track record says a lot. Those folks may need a public-private partnership or a co-op or to petition their local government to provide them with broadband service.”

Rural areas like Cedar Grove, which have no access to cable broadband at all, won’t be served by the municipal systems in question. Most of rural North Carolina is too geographically dispersed, and the towns are too small, for these networks to serve them. In those cases, co-ops have sprung up to connect disparate networks and offer connectivity to folks living hundreds of miles from city centers, or even each other.

Despite these differences, a bill restricting new broadband networks would have damaging consequences in the long term. Wally Bowen, the founder and executive director of the Mountain Area Information Network (MAIN) in Asheville, argues that while nonprofit and co-operative networks are not subject to this specific bill, "if [legislators] are successful in prohibiting municipal networks, nonprofit networks could be next." Municipal and rural networks work together to provide broadband to citizens across the state, he says. If one of these networks is threatened, it’s only a matter of time before legislators go after the others.

Bowen says the effort to connect rural citizens has made real progress, though there is much work to be done.

The passage of H129 could end all that before it even begins, creating a political climate in North Carolina in which incumbent telecoms like Time Warner Cable call the shots, bullying legislators into opposing any attempt to build public or nonprofit networks.

As a result, people like Michelle Krempinski would lose all hope of getting real broadband connections to their homes, and of reviving businesses dependent on connections to 21st century networks.

Despite massive public opposition to the bill and tireless organizing by people like Catharine Rice, H129 passed both the House and the Senate in the North Carolina General Assembly. It now sits on the desk of Governor Bev Perdue, who has until May 20 to decide whether to sign or veto it. If she vetoes, it goes back to the Assembly, which can override the veto with a two-thirds majority.

Advocates like Rice believe that the passage of H129 would be a lose-lose situation: Existing and future municipal networks would suffer, and rural residents would lose hope of one day gaining access to dependable, and globally competitive broadband. In a world in which access to information has attained the status of a basic right, we should be outraged that these cable companies—and their conspirators in the North Carolina State Assembly—are able to get away with this.

Josh Levy is the online campaign manager at Free Press, a national, nonpartisan nonprofit dedicated to reforming the media.

I hope those who argue for states' rights and limited regulation fully support the communities in deciding whether to implement their own broadband. This legislation is the epitome of regulatory capture and should be banned.

Despite massive public opposition to the bill and tireless organizing by people like Catharine Rice, H129 passed both the House and the Senate in the North Carolina General Assembly.

It's good to see the Senators and House Representatives are listening to the constituents..oh wait.

Have to love these businesses (and government members) who yell loudly from the hill tops that the free market will save this country from collapse...unless the free market isn't going to work in their favour, then it's a bad thing and needs to be regulated.

I hope those who argue for states' rights and limited regulation fully support the communities in deciding whether to implement their own broadband. This legislation is the epitome of regulatory capture and should be banned.

Fun fact: Not a single NC republican voted against the house resolution to regulate this (and democrats did only a little better). Small government is a great slogan, just so long as it doesn't get in the way of campaign cash flow . . .

I hope those who argue for states' rights and limited regulation fully support the communities in deciding whether to implement their own broadband. This legislation is the epitome of regulatory capture and should be banned.

You would think, but, unfortunately, in the modern GOP what used to be a genuine, intellectually defensible philosophy of limited _federal_ government has in a very ignorant fashion become 'private sector corporate services > public sector corporate services at all levels of government, no matter what'

This is truly unbeleivable. It shows that big business hates regulations unless they specifically help them crush all competition. Since when has our local and federal governments received such a bad name? They are deemed bad when they actually help the citizens over corproations. Municipal networks are the last effort for hooking up people that these A**holes incumbents don;t want to service. Wake up America and say enough is enough!

Can anybody link me to the bill, or at leas summarize the provisions of the bill that you say are bad. I'm pretty sure that the bill doesn't come out and say that only providers X, Y, and Z are allowed to offer service in NC.

I like the argument about protecting taxpayers' money when in fact it's stopping the money being spent on the something the taxpayers apparently support. There's a disconnect somewhere between the idea of not wasting your taxes and not spending them at all.

My prediction (following recent events at the federal level): Rep. Marilyn Avila gets offered a job at Time Warner as a lobbyist after the bill gets signed into law, and releases a statement saying everything was on the up and up, and doesn't see anything ethically wrong with it.

It seems that the people of North Carolina are hopeless, but this issue needs to be driven home during the next election and everyone that voted for it needs to be kicked out of office.

Personally, if I was the Mayor of Cedar Grove and this bill passes, I would do a bunch of surveys to see how much support a community run ISP would have. If their is an overwhelming amount of support, then I would go ahead and start getting one up anyway. Sure their would be a lawsuit, but I would keep on having it built anyway. Judge orders it to stop? Defy that too. If a bill like this gets passed, then public defiance is necessary. In today's political environment, a story like that would be eaten up. I'd be willing to go to jail for it. Go ahead and watch me turn in to Robin Hood.

This country sucks. Our politicians are useless. Any suggestions of a country where the government actually acts to serve the people first? Democracy obviously isn't a requirement, since it doesn't work here.

Personally, if I was the Mayor of Cedar Grove and this bill passes, I would do a bunch of surveys to see how much support a community run ISP would have. If their is an overwhelming amount of support, then I would go ahead and start getting one up anyway. Sure their would be a lawsuit, but I would keep on having it built anyway. Judge orders it to stop? Defy that too. If a bill like this gets passed, then public defiance is necessary. In today's political environment, a story like that would be eaten up. I'd be willing to go to jail for it. Go ahead and watch me turn in to Robin Hood.

The nice thing about a state like NC making a law like this is that it allows neighboring states to take advantage of the stupidity. I am sure that businesses will migrate away from NC because of this and over time NC will realize that creating barriers to development is unwise.

However, I have no sympathy for the folks that live in NC. Obviously no one was beating on the doors of the polititcians voting for this bill. If it was so bad, there would be much more outrage and anyone that voted for the bill would know his/her term of office was at an end. And since there are about 49 other states to choose from, someone can always leave the state (or at least move to a more metropolitan area where acceptable internet access exists). Or you can form a non-profit organization to provide internet and stop whining about losing municipal based versions.

Plus there is always the possibility of changing the law. Form a group and create publicity about the problems cause by the bill and you would be surprised how it changes - politicians are very self-serving like everyone else. In short, stop complaining and start doing something. Or just keep complaining and feeling sorry for yourself - that seems to be the new American way.

I like how the bill suggests that muni isps would engage in predatory pricing. How the crap would they benefit at all from that? If they sell their service at a loss, they just lose money, there is nothing to gain. It's not like any local government is swimming in surpluses these days. It's utter stupidity to suggest that they would throw away money just to spite the ISPs. The real reason is, the ISP's have grown too comfortable with their duopoly. Rather than actually spend the money to compete with the products muni's can offer, they'd rather buy off the competition in the form of shady lobbying and continue to rake in the money from their substandard services.

If she has trouble getting reliable internet access, and it is integral to her business, the point isn't to then subsidize her continued choice to live in a place where she cannot get said access, especially since it isn't trade that requires her to live where she does. I feel the same way for people who made the choice to live a large distance away from any respectable population center and then bemoan the lack of various utility access. There are costs appended to the choices we make, and we should not have those defrayed by the greater public in cases where it isn't necessary (I would support building out utility systems, including telecom access, for farming communities, for example).

I say this as someone who is/was vehemently against the AT&T/T-Mobile & Comcast/Universal mergers and for net neutrality regulations, so it is not a stance born of any bias in favor of telecommunications companies.

This continues to show that corporate money makers can shove the government into making decisions bad for the economy by shoving money in their face. I guarantee that Bev Perdue will be getting a lot of nice gifts from time warner if he passes the bill. But despite that im sure that time warner has their grubby hands in the assembly if he vetos it anyway. If one state does it, whats going to stop them from branching to other states or giving other cable companies the same idea. There needs to be regulation based on actual citizen opinion seeing as the governor was voted into power.

We ended up with this mess because when cable was an new technology we allowed the smaller cable companies to monopolize a region when they were locally owned and the government wanted something more reliable to communicate than over the air radio television. Now most of the little cable companies are merged in to massive national corporations who don't want to have the areas where they still have full control to lose it to an co-op broadband provider witch is how most of the old companies started. Heck they are so used to selling you the programming they want to stop 3rd party video sited from undercutting pay per view and internal on demand systems.

I should also say that I am for municipal buildout of networks, too, but the community noted at the beginning is unincorporated and incredibly sparsely populated. No municipality that was responsibly managing their finances (unless they had a contract with these people to provide) would build out to them.

"The provisions of G.S. 160A-340.1, 160A-340.4, and 160A-340.5 do not apply to the provision of communications service in an unserved area. A city seeking to provide communications service in an unserved area shall petition the North Carolina Utilities Commission for a determination that an area is unserved. The petition shall identify with specificity the geographic area for which the designation is sought. Any private communications service provider, or any other interested party, may, within a time established by order of the Commission, which time shall be no fewer than 30 days, file with the Commission an objection to the designation on the grounds that one or more areas designated in the petition is not an unserved area or that the city is not otherwise eligible to provide the service. For purposes of this subsection, the term "unserved area" means a census block, as designated by the most recent census of the U.S. Census Bureau, in which at least fifty percent (50%) of households either have no access to high-speed Internet service or have access to high-speed Internet service only from a satellite provider. A city may petition the Commission to serve multiple contiguous unserved areas in the same proceeding."

So all this bill does is prevent local government from using taxpayer money to compete with private companies in the field of broadband provision. Still pretty stupid and short cited (IMHO) but (unlike what is foolishly suggested in the article) there is no way to stop a not-for profit (or even a for-profit) org from deciding to offer high-speed internet service. And this law is completely trivial to get around. Your local government can simply decide (after getting voter approval) to run fiber to every home without providing any service and then allow private companies the chance to actually use the fiber. If you already have a communication network (which is not likely,) you can always decide to upgrade as well. In the end, the concern about a arguably stupid bill is way overblown.

What's the purported argument in support of the bill? I'm not talking about analysis of what the real motivations are, but rather what they're /saying/ their motivations are.

(For instance: AT&T/T-Mobile are claiming T-Mobile is struggling and strengthening AT&T's network through the merger will therefore enable the company to better serve the large quantities of customers than the two companies can separately.)

I've been following this bill with some interest. Its impressive the extent to which the NC state government has been utterly corrupted by Time Warner Cable.

It's actually not when you consider how corrupted they are by other lobby groups such as Blue Cross/Blue Shield and their leeching the state of money as state employees pay the price. I'm surprised this bill hasn't swept through the state legislature with many lined pockets as proof.

From a fundamental standpoint, there is little utility in having lots of competition with 5-10 companies all laying down fiber to each home in parallel. There is even less utility if these homes are out in the country. Therefore, I have absolutely no problem with municipal broadband initiatives where one line is put in, and then companies compete upstream at the nodes.

Following that line of logic, municipalities could just buy existing lines using eminent domain laws. Then, we could suddenly have lots and lots of competition (and gnashing of teeth from incumbent ISPs) . Too bad the Internet is not considered a utility...

While I don't know the local politics in North Carolina, if it works like the rest of the country then the people most likely to live in a small enough town that they aren't served by multiple (or any) high-speed ISPs are also most likely the people sending Republicans to the statehouse. It's highly likely that the people most likely to benefit from municipal broadband are represented by the people most hell-bent on preventing them from getting it.

If she has trouble getting reliable internet access, and it is integral to her business, the point isn't to then subsidize her continued choice to live in a place where she cannot get said access, especially since it isn't trade that requires her to live where she does. I feel the same way for people who made the choice to live a large distance away from any respectable population center and then bemoan the lack of various utility access. There are costs appended to the choices we make, and we should not have those defrayed by the greater public in cases where it isn't necessary.

++ Or to put it another way, if you feel you are being left behind, do something about it.

The nice thing about a state like NC making a law like this is that it allows neighboring states to take advantage of the stupidity. I am sure that businesses will migrate away from NC because of this and over time NC will realize that creating barriers to development is unwise.

Or it could embolden ISPs to enact this law in other states. A critical mass of citizens is not able to give informed opposition or support to this bill. The issue is simply to esoteric for most to comprehend, instead they are bogged down by issues like gas prices, gay marriage and original copies of Obama's birth certificate.

If she has trouble getting reliable internet access, and it is integral to her business, the point isn't to then subsidize her continued choice to live in a place where she cannot get said access, especially since it isn't trade that requires her to live where she does. I feel the same way for people who made the choice to live a large distance away from any respectable population center and then bemoan the lack of various utility access. There are costs appended to the choices we make, and we should not have those defrayed by the greater public in cases where it isn't necessary (I would support building out utility systems, including telecom access, for farming communities, for example).

I say this as someone who is/was vehemently against the AT&T/T-Mobile & Comcast/Universal mergers and for net neutrality regulations, so it is not a stance born of any bias in favor of telecommunications companies.

The municipal networks that are being legislated against aren't subsidized by the general public- they're being funded locally by the people they benefit. Rather than being federal or state government projects where the funding is drawn from a larger tax base, these are local governments(i.e. city councils) trying to build out high-speed networks where the existing corporate interests don't feel that it's worth their time or money. They're paid for via local tax revenue and loans which get payed off via money made by the network once it's up.

This bill basically says that the people can't respond to poor treatment by corporations by building their own network- or rather, making said networks financially insolvent, so that nobody can afford to build them.

...in case a poor regulator ever finds this page I would like to state that I too use GIS for grad school but more importantly I have a contract job doing video/audio work and have to ship 100 GB/month off to the office.

Were I to be with AT&T I would be over their caps, as I average between 150-200 GB/month (mostly UP).

Data caps need to end unless this country wants business and innovation to be stifled in its cradle.

A city seeking to provide communications service in an unserved area shall petition the North Carolina Utilities Commission for a determination that an area is unserved. The petition shall identify with specificity the geographic area for which the designation is sought.

Delay and costly red tape while the state decides a local issue. Funny how internet is a "utility" so it can be squashed, but not a "utility" that a government can provide.

Quote:

Any private communications service provider, or any other interested party, may, within a time established by order of the Commission, which time shall be no fewer than 30 days, file with the Commission an objection to the designation on the grounds that one or more areas designated in the petition is not an unserved area or that the city is not otherwise eligible to provide the service.

So the local cable company can hold up the process for an extended period of time, say they are "planning" to service the area, kill the muni project and then the service just never gets installed, or doesn't for a few decades. Very simple lawyer tactic. Restarting a failed muni project is going to be much toughter than starting one the first time around.

Quote:

For purposes of this subsection, the term "unserved area" means a census block, as designated by the most recent census of the U.S. Census Bureau, in which at least fifty percent (50%) of households either have no access to high-speed Internet service or have access to high-speed Internet service only from a satellite provider. A city may petition the Commission to serve multiple contiguous unserved areas in the same proceeding."

Without defining high speed, we have a marketting issue versus a reality issue. Verizon defines their CDMA cell phone data plan as "high speed," but it is woefully inadequate. So is 768k DSL. While no law should define an actual minimum speed, this leaves the interpretation of "high speed" to exactly whom?

For those of you who are saying someone should just move, I take it you don't have homes (which can't sell right now), often two necessary jobs in a family (which are scarce for many), kid(s) in school and aging parents to take care of?

If she has trouble getting reliable internet access, and it is integral to her business, the point isn't to then subsidize her continued choice to live in a place where she cannot get said access, especially since it isn't trade that requires her to live where she does. I feel the same way for people who made the choice to live a large distance away from any respectable population center and then bemoan the lack of various utility access. There are costs appended to the choices we make, and we should not have those defrayed by the greater public in cases where it isn't necessary (I would support building out utility systems, including telecom access, for farming communities, for example).

I say this as someone who is/was vehemently against the AT&T/T-Mobile & Comcast/Universal mergers and for net neutrality regulations, so it is not a stance born of any bias in favor of telecommunications companies.

The municipal networks that are being legislated against aren't subsidized by the general public- they're being funded locally by the people they benefit. Rather than being federal or state government projects where the funding is drawn from a larger tax base, these are local governments(i.e. city councils) trying to build out high-speed networks where the existing corporate interests don't feel that it's worth their time or money. They're paid for via local tax revenue and loans which get payed off via money made by the network once it's up.

This bill basically says that the people can't respond to poor treatment by corporations by building their own network- or rather, making said networks financially insolvent, so that nobody can afford to build them.

I am perfectly ok with municipalities building out their own networks, especially (although I don't view that as a requirement) in situations where private corporations have dragged their feet. However, they ARE being subsidized, whether it is through general tax revenues of the incorporated areas (the case that the article starts out with is a lady who doesn't even live in an incorporated area; there isn't an appreciable "municipality" to think about, here) or lower rates for borrowing engendered by the fact that the entity doing the borrowing is as large as it is/has a more stable revenue stream than a private corporation.

Listen, I am for municipal networks, and I don't agree with the bill. I take issue with the case presented at the beginning of the article, though. If you live in the boonies, you have to pay the price for it, as country livin' with all the amenities we take for granted in the city is really expensive. I'd have no problem if the municipalities made the decision to build out to these areas, either, presuming they recognized that fact and charged people in those areas an appropriately higher user fee.

For those of you who are saying someone should just move, I take it you don't have homes (which can't sell right now), often two necessary jobs in a family (which are scarce for many), kid(s) in school and aging parents to take care of?

The law is not taking away any existing internet access - merely creating assurances that public money will not be used to (allegedly) unfairly compete with for-profit companies. So you didn't lose anything. If you didn't take into account the fact that your location might have limitations when you moved there, well, you should probably not be running a business anyway. I would love to live in a remote, beautiful area surrounded by wilderness. Unfortunately, the job situations in those locations tends to be pretty poor. So I live in a smog-infested suburban setting. I have pretty much no sympathy for those living in remote areas. I do believe, however, that technology will eventually make it possible to enjoy those wilderness settings with good data rates. And then I will be the one that is pissed.

For those of you who are saying someone should just move, I take it you don't have homes (which can't sell right now), often two necessary jobs in a family (which are scarce for many), kid(s) in school and aging parents to take care of?

The law is not taking away any existing internet access - merely creating assurances that public money will not be used to (allegedly) unfairly compete with for-profit companies. So you didn't lose anything. If you didn't take into account the fact that your location might have limitations when you moved there, well, you should probably not be running a business anyway. I would love to live in a remote, beautiful area surrounded by wilderness. Unfortunately, the job situations in those locations tends to be pretty poor. So I live in a smog-infested suburban setting. I have pretty much no sympathy for those living in remote areas. I do believe, however, that technology will eventually make it possible to enjoy those wilderness settings with good data rates. And then I will be the one that is pissed.

Technology does allow it. The whole point is that the companies who largely control that technology don't want to use it to serve these areas, but they don't want anyone else to either. Municipal broadband projects are largely driven by the fact that no one is competing in the broadband market for the area anyway; either no one offers it or only one company does, and they set the prices high and provide low-quality service for the price.